EUROPEAN UNION – The Council of Member State Finance Ministers (Ecofin) today (June 5) formally agreed on a proposal to allow asset managers to operate more easily in Member State markets via the introduction of a new service provider passport.

The changes to the UCITS directive, which regulates common funds and unit trusts, would affect the regulation of the funds and introduce a “minimum” harmonisation of fund management companies, according to Ecofin.
The proposals include new regulations for prudential rules and rules of conduct and aim at securing investor protection within the community.

The introduction of the service provider passport should make it easier for fund managers to operate on an interstate level.
Rules on simplified prospectuses for clients will also make it possible for them to compare funds from different member states, notes Ecofin.

The council of ministers says it hopes the proposals will make investment in mutual funds a more competitive form of saving for Europeans.
The European Parliament will now have to consider the proposals before any ratification.